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Imagine having a list of goals to achieve one by one, with a savings fund set aside specifically for fulfilling those aspirations. The aim is to ensure that the returns from this fund surpass the inflation rate, thereby safeguarding the ability to meet these goals effectively.
So, the question arises: Would investing in the Bajaj Allianz Life Invest Protect Goal Plan potentially offer superior risk-adjusted returns?
In this article, we’ll delve into a review of this Bajaj Alliance Life Invest Protect Goal Plan to assess its potential yield. This can aid in determining whether incorporating the Bajaj Allianz Invest Protect Goal Plan into your investment portfolio is a wise decision.
Table of Contents:
What is the Bajaj Alliance Life Invest Protect Goal Plan?
What are the Features of the Bajaj Alliance Life Invest Protect Goal Plan?
Who is Eligible for the Bajaj Alliance Life Invest Protect Goal Plan?
What are the Benefits in the Bajaj Alliance Life Invest Protect Goal Plan?
Investment Strategies & Fund options of Bajaj Alliance Life Invest Protect Goal Plan
Charges under Bajaj Alliance Life Invest Protect Goal Plan
Grace period, Discontinuance & Revival of Bajaj Alliance Life Invest Protect Goal Plan
Free look period of Bajaj Alliance Life Invest Protect Goal Plan
Surrendering Bajaj Alliance Life Invest Protect Goal Plan
Advantages of Bajaj Alliance Life Invest Protect Goal Plan
Disadvantages of Bajaj Alliance Life Invest Protect Goal Plan
Research Methodology of Bajaj Alliance Life Invest Protect Goal Plan
Benefit Illustration – IRR Analysis of Bajaj Alliance Life Invest Protect Goal Plan
Bajaj Alliance Life Invest Protect Goal Plan Vs Other Investment Products
Bajaj Allianz Life Invest Protect Goal Vs. Pure Term + PPF / ELSS
Final Verdict on Bajaj Allianz Life Invest Protect Goal
What is the Bajaj Alliance Life Invest Protect Goal Plan?
Bajaj Allianz Life Invest Protect Goal is a Unit-linked Insurance Plan (ULIP). Bajaj Alliance Life Invest Protect Goal Plan helps you secure the future of your loved ones while providing market-linked returns on your premiums.
What are the Features of the Bajaj Alliance Life Invest Protect Goal Plan?
- Lump sum payout for your loved ones in your absence
- Growth of your savings corpus through market-linked returns
- Return of Charges to help boost your fund value
- Loyalty additions & Fund Maintenance Boosters enhance the maturity value.
- Riders are available to provide enhanced protection
- Tax benefit as per applicable laws
Who is Eligible for the Bajaj Alliance Life Invest Protect Goal Plan?
| Minimum | Maximum | |
| Age at Entry | 18 years | 60 years |
| Age at Maturity | 38 years | 100 years |
| Policy term | 20 years | 40 years |
| Sum assured | 7*Times the annualised premium | As per Board approval |
| Premium paying term | Limited pay: 5,6,7,8,9,10,11,12 | Regular pay: same as policy term |
What are the Benefits in the Bajaj Alliance Life Invest Protect Goal Plan?
i.) Death benefit
On the death of the Life Assured during the Bajaj Alliance Life Invest Protect Goal Plan Policy term, the higher of the following shall be payable
- Sum Assured including Top-Up Sum Assured, if any
- Total Fund Value, if any
- Guaranteed Benefit of 105% of the total premiums including Top-Up premiums, if any, received up to the date of death
ii.) Maturity Benefit
On survival of Life Assured to the maturity date, Total Fund Value as on the date of Maturity, shall be payable.
iii.) Loyalty Advantage
Return of Premium Allocation Charge (ROAC) at the end of the 10th policy year.
Mortality charges deducted during the Bajaj Alliance Life Invest Protect Goal Plan policy term shall be added back to your savings at the end of specific policy years. It is gradually added back based on the policy term.
iv.) Loyalty Addition
A specific percentage of the average of your previous Three years’ daily Regular Premium Fund Value will be added to your current fund value.
From the 4th policy year, at the start of any policy month, after premium payment (if any) and before any due charges are deducted, if your Total Fund Value falls below one Annualized Premium, then, the company shall add Fund maintenance Booster (FMB) to your Regular Premium Fund Value.
FMB = One Annualized Premium – Total Fund.
If any of your family members is an existing policyholder of Bajaj Allianz Life Insurance, then a Family Benefit of 1% of the average of your previous Three years’ daily Regular Premium Fund Value will be paid to you on maturity.
Investment Strategies & Fund options of Bajaj Alliance Life Invest Protect Goal Plan
At Bajaj Alliance Life Invest Protect Goal Plan policy inception, the customer can choose any one of the below two mentioned portfolio strategies.
Investor Selectable Portfolio Strategy
In this strategy, you can choose to invest your premiums in any one or more of the below-mentioned funds –
| Asset Allocation | ||||
| Fund Name | Equity | Debt | Money Market | Risk profile |
| Equity Growth Fund II | Not less than 60% | 0% – 40% | 0% – 40% | Very High |
| Accelerator Mid-Cap Fund II | Not less than 60% (at least 50% in Mid-cap) | 0% – 40% | 0% – 40% | Very High |
| Pure Stock Fund | Not less than 60% | 0% – 40% | 0% – 40% | Very High |
| Pure Stock Fund II | Not less than 75% | — | 0% -25% | Very High |
| Asset Allocation Fund II | 40% – 90% | 0% – 60% | 0% – 50% | High |
| Blue-chip Equity Fund | Not less than 60% | 0% – 40% | 0% – 40% | High |
| Bond Fund | — | 40% – 100% | 0% – 60% | Moderate |
| Liquid Fund | — | — | 100% | Low |
| Flexi Cap Fund | 65% – 100% | 0% – 35% | 0% – 35% | Very High |
| Sustainable Equity Fund | 65% – 100% | 0% – 35% | 0% – 35% | Very High |
| Small Cap Fund | 65% – 100% | 0% – 35% | 0% – 35% | Very High |
| Midcap Index Fund | 65% – 100% | 0% – 35% | 0% – 35% | Very High |
| Dynamic Asset Allocation Fund | 10% 90% | 10% 90% | 0% – 80% | High |
| SmallCap Quality Index Fund | 65% – 100% | 0% – 35% | 0% – 35% | Very High |
| Individual Short-Term Debt Fund | — | 40% – 100% | 0% – 60% | Moderate |
The allocation of assets varies across different fund options, and the risk profile is determined by this allocation. Therefore, it’s important to select funds based on your risk tolerance.
Automatic Transfer Strategy
This strategy allows you to manage your exposure to equity markets by systematically transferring your money from a lower risk Fund to a higher risk Fund(s). Premiums received will be initially allocated either in Bond Fund or Liquid Fund, as per your choice.
Later, at every monthly anniversary of the policy, a proportion of the Total Fund Value shall be switched to the other Fund(s) as selected by you.
Charges under Bajaj Alliance Life Invest Protect Goal Plan
A.) Mortality Charge
A mortality Charge is applied to the Sum at Risk under the policy and is deducted at the rate applicable on a monthly basis.
B.) Fund Management charge
| Fund Name | Fund Management Charge |
| Equity Growth Fund II | 1.35% |
| Accelerator Mid-Cap Fund II | 1.35% |
| Pure Stock Fund | 1.35% |
| Pure Stock Fund II | 1.30% |
| Asset Allocation Fund II | 1.25% |
| Blue-chip Equity Fund | 1.25% |
| Bond Fund | 0.95% |
| Liquid Fund | 0.95% |
| Flexi Cap Fund | 1.35% |
| Sustainable Equity Fund | 1.35% |
| Small Cap Fund | 1.35% |
| Midcap Index Fund | 1.35% |
| Dynamic Asset Allocation Fund | 1.35% |
| SmallCap Quality Index Fund | 1.35% |
| Individual Short-Term Debt Fund | 0.95% |
| Discontinued Life Policy Fund | 0.50% |
C.) Policy Administration Charge
For the first five Policy Years – Nil. From the 6th year to the end of the Policy Term – 4.50% p.a. of Annualized Premium (capped to a maximum of Rs. 500 per month).
D.) Premium Allocation Charge
The premium allocation charge is deducted from the premium amount at the time of premium payment till 5th year. From the 6th policy year onwards, there is no Premium Allocation Charge.
E.) Miscellaneous Charge
The Miscellaneous Charge will be ₹ 100 per applicable incidence.
F.) Discontinuance / Surrender Charge
Under a Regular/Limited Premium Policy, the Discontinuance Charge shall apply to the Regular Premium Fund Value based on the year of discontinuance & premium amount.
Inference from the charges: ULIP products typically impose charges that are not present in other market-related products. Charges such as discontinuance fees, policy administration charges, and premium allocation fees represent overhead costs for investors.
In the long run, these charges can erode your returns, ultimately diminishing the overall profitability of your investment.
Grace period, Discontinuance & Revival of Bajaj Alliance Life Invest Protect Goal Plan
Grace period
In this Bajaj Alliance Life Invest Protect Goal Plan, a grace period of 30 days for yearly, half-yearly & quarterly premium payment frequency, and 15 days is available for monthly premium payment frequency from the due date of Regular/Limited Premium payment.
Discontinuance
On Discontinuance of Regular Premiums due during the first 5 Policy years, the Bajaj Alliance Life Invest Protect Goal Plan Policy will be converted to a Discontinued Life Policy, and the Regular Premium Fund Value less the Discontinuance/Surrender charge along with Top-up Premium Fund Value, if any, will be transferred to the Discontinued Life Policy fund.
The Discontinuance Value shall be payable as the Surrender Benefit at the end of the lock-in period of five Policy years.
On Discontinuance of Regular Premiums due after the lock-in period of 5 Policy years, the Bajaj Alliance Life Invest Protect Goal Plan Policy will be, immediately & automatically, converted to a Paid-up Policy.
The Paid-up Sum Assured will be the Sum Assured in the Bajaj Alliance Life Invest Protect Goal Plan Policy multiplied by the proportion of the number of Regular Premiums paid to the number of Regular Premiums payable in the Policy.
Revival
A Bajaj Alliance Life Invest Protect Goal Plan policy that has been discontinued or is paid up due to non-payment of premiums can only be revived within 3 years from the date of the first unpaid premium.
Free look period of Bajaj Alliance Life Invest Protect Goal Plan
If the policyholder disagrees with any of the terms or conditions of Bajaj Alliance Life Invest Protect Goal Plan, he has the option to return the policy within 15 days from the date of receipt of the policy document and a period of 30 days in case of electronic policies and policies obtained through distance mode.
Surrendering Bajaj Alliance Life Invest Protect Goal Plan
During the lock-in period of the first 5 policy years: The Regular Premium Fund Value less the discontinuance/ surrender charge, along with the Top-Up Premium Fund Value, if any, as on the date of surrender, will be credited to the Discontinued Life Policy Fund.
The Discontinuance Value, at the end of the Lock-in Period, will be payable to the Policyholder as Surrender Value.
On surrender after the lock-in period, the surrender value available will be the Total Fund Value as of the date of surrender.
Advantages of Bajaj Alliance Life Invest Protect Goal Plan
- You can change your Portfolio Strategy during the Bajaj Alliance Life Invest Protect Goal Plan policy anniversary.
- Under the Selectable portfolio strategy of Bajaj Alliance Life Invest Protect Goal Plan, you can switch units between funds.
- You can opt to change your Prevailing premium payment frequency at Bajaj Alliance Life Invest Protect Goal Plan Policy Anniversary
- You can increase the Sum Assured at any Bajaj Alliance Life Invest Protect Goal Plan policy anniversary
Disadvantages of Bajaj Alliance Life Invest Protect Goal Plan
- No loan facility is available under the Bajaj Alliance Life Invest Protect Goal Plan.
- The Bajaj Alliance Life Invest Protect Goal Plan does not offer any liquidity during the first five years of the policy term.
- The return on charges is not attractive, as they do not consider the time value of money.
- The asset allocation under the fund options looks similar. So, the fund options seem repetitive.
Research Methodology of Bajaj Alliance Life Invest Protect Goal Plan
In this section, we’ll assess the potential return of the Bajaj Allianz Life Invest Protect Goal Plan, which offers investment opportunities in the market.
Any market-linked product should ideally outperform inflation, so we’ll examine the risk-adjusted return of this Bajaj Alliance Life Invest Protect Goal Plan.
The resulting data can then be compared with other market-related investment options. Let’s take a quote from the Bajaj Allianz Life website and calculate the Internal Rate of Return (IRR).
Benefit Illustration – IRR Analysis of Bajaj Alliance Life Invest Protect Goal Plan
A 40-year-old male buys Bajaj Allianz Life Invest Protect Goal Plan for a sum assured of ₹ 93.5 Lakhs. The Bajaj Alliance Life Invest Protect Goal Plan policy term & the premium paying term is 20 years. The annualised premium amounts to ₹ 1.70 Lakhs.
| Male | 40 years |
| Sum Assured | ₹ 93,50,000 |
| Policy Term | 20 years |
| Premium Paying Term | 20 years |
| Annualised Premium | ₹ 1,70,000 |
If he pays a premium for 20 years, he could get the fund value at maturity. The assumed rate of returns indicated at 4% and 8% are illustrative and not guaranteed and do not indicate the upper or lower limits of returns under the Bajaj Alliance Life Invest Protect Goal Plan policy.
| At 4% p.a. | At 8% p.a. | ||||
| Age | Year | Annualised premium / Maturity benefit | Death benefit | Annualised premium / Maturity benefit | Death benefit |
| 40 | 1 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 41 | 2 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 42 | 3 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 43 | 4 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 44 | 5 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 45 | 6 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 46 | 7 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 47 | 8 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 48 | 9 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 49 | 10 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 50 | 11 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 51 | 12 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 52 | 13 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 53 | 14 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 54 | 15 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 55 | 16 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 56 | 17 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 57 | 18 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 58 | 19 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 59 | 20 | -1,70,000 | 93,50,000 | -1,70,000 | 93,50,000 |
| 60 | 40,90,850 | 93,50,000 | 62,66,032 | 93,50,000 | |
| IRR | 1.73% | 5.52% | |||
In the 4% scenario, based on the Bajaj Alliance Life Invest Protect Goal Plan calculator the final fund value amounts to ₹ 40.90 Lakhs with an IRR of 1.73%. In the 8% scenario, based on Bajaj Alliance Life Invest Protect Goal Plan, the final fund value reaches ₹ 62.66 Lakhs with an IRR of 5.52%.
However, in both scenarios, the returns fall short of the inflation rate, making it insufficient for goal fulfilment. Consequently, investing in Bajaj Allianz Life Invest Protect Goal may not be the most suitable option.
Bajaj Alliance Life Invest Protect Goal Plan Vs Other Investment Products
Let’s now compare Bajaj Allianz Life Invest Protect Goal with other comparable market-linked products. To ensure a fair comparison, we’ll use the same metrics as outlined in the previous example.
While Bajaj Allianz Life Invest Protect Goal combines life coverage with investment potential, we’ll seek similar alternatives for evaluation.
Bajaj Allianz Life Invest Protect Goal Vs. Pure Term + PPF / ELSS
By opting for a pure term life insurance policy with a sum assured of ₹ 1 crore, costing ₹ 20,100 annually for a 20-year term, you could save ₹ 1.49 Lakhs compared to the earlier illustration. This saved amount could be redirected towards wealth accumulation.
| Pure Term Life Insurance Policy | |
| Sum Assured | ₹ 1 crore |
| Policy Term | 20 years |
| Premium Paying Term | 20 years |
| Annualised Premium | ₹ 20,100 |
| Investment | ₹ 1,49,900 |
| Term Insurance + PPF | Term insurance + ELSS | ||||
| Age | Year | Term Insurance premium + PPF | Death benefit | Term Insurance premium + ELSS | Death benefit |
| 40 | 1 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 41 | 2 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 42 | 3 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 43 | 4 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 44 | 5 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 45 | 6 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 46 | 7 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 47 | 8 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 48 | 9 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 49 | 10 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 50 | 11 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 51 | 12 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 52 | 13 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 53 | 14 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 54 | 15 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 55 | 16 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 56 | 17 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 57 | 18 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 58 | 19 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 59 | 20 | -1,70,000 | 1,00,00,000 | -1,70,000 | 1,00,00,000 |
| 60 | 66,53,849 | 1,00,00,000 | 1,11,96,866 | 1,00,00,000 | |
| IRR | 6.03% | 10.36% | |||
For wealth accumulation, we’ve considered two investment avenues: the PPF account and the ELSS fund. Under the PPF account, the final maturity value after 20 years is ₹ 66.53 Lakhs, resulting in an IRR of 6.03% when combined with the pure term life insurance policy.
On the other hand, ELSS redemptions are subject to capital gains tax. The final pre-tax maturity value after 20 years is ₹ 1.20 crores, which reduces to ₹ 1.11 Crores post-tax. The IRR for the pure-term life insurance policy along with ELSS investment stands at 10.36%.
| ELSS Tax Calculation | |
| Maturity value after 20 years | 1,20,96,740 |
| Purchase price | 29,98,000 |
| Long-Term Capital Gains | 90,98,740 |
| Exemption limit | 1,00,000 |
| Taxable LTCG | 89,98,740 |
| Tax paid on LTCG | 8,99,874 |
| Maturity value after tax | 1,11,96,866 |
In these alternative investments, the yield exceeds inflation, facilitating wealth accumulation and enabling the fulfilment of all financial goals. Opting for the Bajaj Allianz Life Invest Protect Goal plan may result in a shortfall in the required corpus for your goals.
Final Verdict on Bajaj Allianz Life Invest Protect Goal
Like any other ULIP Plan, Bajaj Allianz Life Invest Protect Goal provides life cover protection and a chance for market-linked investments. However, the potential returns of this plan don’t match up to those of other market-linked products due to hefty charges and high-agents commissions.
Despite investing in the market through this plan, the returns generated are insufficient to outpace inflation. This defeats the purpose of investing in the market.
Alternatively, for life cover, you could consider a pure term life insurance policy offering high coverage at an affordable premium. For wealth accumulation, building a diversified investment portfolio is advisable. Depending on your risk tolerance, you can select an appropriate product.
Is it advisable to depend exclusively on platforms such as Quora, Twitter, and Facebook for financial guidance? If you encounter any difficulties in choosing your insurance policy or investment product, seeking guidance from a Certified Financial Planner is recommended. They can assist you in creating a goal-based financial plan tailored to your needs.
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